CST: 27/06/2016 04:18:09   

First National Bank of Northern California Reports Fourth Quarter 2015 Earnings of $0.45 per Diluted Share

150 Days ago

SOUTH SAN FRANCISCO, CA--(Marketwired - Jan 28, 2016) -  FNB Bancorp (OTCQB: FNBG), parent company of First National Bank of Northern California (the "Bank"), today announced net earnings available to common shareholders for the fourth quarter of 2015 of $2,088,000 or $0.45 per diluted share, compared to net earnings available to common shareholders of $4,123,000 or $0.89 per diluted share for the fourth quarter of 2014.

The fourth quarter of 2015 was the first full quarter following the acquisition of America California Bank. This acquisition helped the bank to achieve average assets of $1.1 billion during the fourth quarter of 2015, an increase of $225 million over fourth quarter 2014 levels. 

During the fourth quarter, net loans grew by $25.9 million, which equates to an annualized growth rate of 15%. During this same time period, total assets grew by only $11.7 million or an annualized growth rate of 4%. Funding for fourth quarter loan growth was accomplished through increased short term FHLB advances of $17 million that had an annualized interest cost of less than 0.5% and a decrease in cash balances in our interest earning DDA account with the Federal Reserve Bank ("FRB"). At December 31, 2015, our DDA account balance with the FRB totaled $0.4 million, a decrease of $23.8 million during the fourth quarter of 2015. 

The Company's increased lending, decreased cash position, and use of low cost borrowings allowed the Company to maintain a taxable equivalent net interest margin at 4.0% during the quarter, the same level achieved during the third quarter of 2015.

"The fourth quarter of 2015 produced solid results for the Company, highlighted by the successful integration of the computer systems utilized by America California Bank with and into the systems maintained for First National Bank of Northern California. The Bank was able to leverage the relationships acquired in the America California Bank acquisition and utilize the growth in equity that has occurred to grow the Bank's loan portfolio during the quarter. There was some deposit base runoff during the fourth quarter, but the reduction in deposit levels was primarily isolated to a few deposit relationships that reduced their deposit positions with the Bank during the fourth quarter, but continue to bank with us," stated Tom McGraw, CEO.

                       
Financial Highlights: Fourth Quarter, 2015 (Unaudited)  
Consolidated Statements of Earnings
(in '000s except earnings per share amounts)
Three months
Ended
December 31,
    Three Months
Ended
December 31,
    Twelve Months
Ended
December 31,
    Twelve Months
Ended
December 31,
 
  2015     2014     2015     2014  
                       
Interest income $ 11,021     $ 9,315     $ 39,282     $ 36,859  
Interest expense   795       531       2,597       2,093  
  Net interest income   10,226       8,784       36,685       34,766  
Provision (recovery) for loan losses   (530 )     (1,095 )     (305 )     (1,020 )
Noninterest income   1,127       3,522       4,496       6,589  
Noninterest expense   8,714       6,761       29,925       27,868  
  Income before income taxes   3,169       6,640       11,561       14,507  
Provision for income taxes   (1,081 )     (2,517 )     (3,364 )     (5,098 )
  Net earnings   2,088       4,123       8,197       9,409  
  Dividends and discount accretion on preferred stock   -       -       -       170  
  Net earnings available to common shareholders $ 2,088     $ 4,123     $ 8,197     $ 9,239  
                               
                               
Basic earnings per share $ 0.46     $ 0.92     $ 1.82     $ 2.08  
Diluted earnings per share $ 0.45     $ 0.89     $ 1.77     $ 2.01  
                               
Average assets $ 1,126,582     $ 914,250     $ 1,010,435     $ 901,533  
Average equity $ 108,822     $ 94,500     $ 100,621     $ 90,938  
Return on average assets   0.74 %     1.80 %     0.81 %     1.02 %
Return on average equity   7.67 %     17.45 %     8.15 %     10.16 %
Efficiency ratio   77 %     55 %     73 %     67 %
Net interest margin (taxable equivalent)   4.00 %     4.17 %     4.06 %     4.14 %
Average shares outstanding   4,536       4,469       4,516       4,444  
Average diluted shares outstanding   4,670       4,608       4,644       4,586  
                               
                               
                               
Financial Highlights: Fourth Quarter, 2015   As of   As of
Consolidated Balance Sheets   December 31,   December 31,
(in '000s)   2015   2014
         
  Assets:            
Cash and due from banks   $ 12,314   $ 14,978
Interest-bearing time deposits with            
other financial institutions     205     2,784
Securities available for sale, at fair value     329,207     264,881
Loans, net     722,747     583,715
Premises, equipment and leasehold improvements, net     10,202     10,951
Bank owned life insurance     15,845     12,510
Other equity securities     6,748     5,769
Accrued interest receivable     4,511     3,725
Other real estate owned, net     1,026     763
Goodwill     4,580     1,841
Prepaid expenses     997     1,045
Other assets     15,967     14,202
Total assets   $ 1,124,349   $ 917,164
             
  Liabilities and stockholders' equity:            
Deposits:            
  Demand and NOW   $ 366,126   $ 292,359
  Savings and money market     491,633     394,676
  Time     125,430     105,159
    Total deposits     983,189     792,194
Federal Home Loan Bank advances     17,000     9,000
Note payable     4,950     5,550
Accrued expenses and other liabilities     15,048     13,332
    Total liabilities     1,020,187     820,076
Stockholders' equity     104,162     97,088
  Total liabilities and stockholders' equity   $ 1,124,349   $ 917,164
             
Other Financial Information            
Allowance for loan losses   $ 9,970   $ 9,700
Nonperforming assets   $ 7,800   $ 6,411
Total gross loans   $ 732,717   $ 593,415
             

"Year over year fourth quarter noninterest income comparisons are significant, due primarily to the gain on sale of branch premise property of approximately $2 million that occurred during the fourth quarter of 2014. Increased noninterest expenses during the fourth quarter of 2015 were primarily related to increased expense accruals related to the restructuring efforts pertaining to the Company's executive salary continuation agreements. The amendment of these agreements is necessary to insure these agreements minimize any potential negative income tax consequences and better associate the expense accruals of the Bank with the achievements the Bank has been able to achieve. Our capital positions at December 31, 2015 remain "well capitalized" as defined by Basel III regulations, with the Bank maintaining the following capital ratios as of December 31, 2015: Leverage capital ratio of 9.08%, Common Equity Tier 1 Risk-based capital ratio of 10.53%; Tier 1 Risk-based capital ratio of 10.53% and a Total Risk-Based capital ratio of 11.58%," continued Tom McGraw. 

Cautionary Statement: This release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those stated herein. Management's assumptions and projections are based on their anticipation of future events and actual performance may differ materially from those projected. Risks and uncertainties which could impact future financial performance include, among others, (a) competitive pressures in the banking industry; (b) changes in the interest rate environment; (c) general economic conditions, either nationally or regionally or locally, including fluctuations in real estate values; (d) changes in the regulatory environment; (e) changes in business conditions or the securities markets and inflation; (f) possible shortages of gas and electricity at utility companies operating in the State of California, and (g) the effects of terrorism, including the events of September 11, 2001, and thereafter, and the conduct of war on terrorism by the United States and its allies. Therefore, the information set forth herein, together with other information contained in the periodic reports filed by FNB Bancorp with the Securities and Exchange Commission, should be carefully considered when evaluating its business prospects. FNB Bancorp undertakes no obligation to update any forward-looking statements contained in this release.

Contacts:
Tom McGraw
Chief Executive Officer
(650) 875-4864

Dave Curtis
Chief Financial Officer
(650) 875-4862